NATURAL TEHNOLOGIES PVT. LTD,, Jaipur V. ACIT, Jaipur

ITA 976/JPR/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5308 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 11-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Depreciation; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 10B; 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOE FLAG ;KNO] YS[KK LNL; ,OA JH YFYR DQEKJ] U; KF;D LNL; DS LE{K BEFORE: SHRI VIKRAM SINGH YADAV, AM & SHRI LALIET K UMAR, JM VK;DJ VIHY LA-@ ITA NOS. 976/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2007-08 . M/S. NATURAL TECHNOLOGIES PVT. LTD., (NOW MERGED WITH HCL INFOSYSTEMS LTD.) E-26, SIDHARTH NAGAR, MALVIYA NAGAR, JAIPUR. CUKE VS. THE ACIT, CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AABCN 4175 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY S BY : SHRI PRAKUL KHURANA & SHRI ADITYA VIJAY (ADVOCATES) JKTLO DH VKSJ LS@ REVENUE BY : SHRI PRITHVIRAJ MEENA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 09.05.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 27/05/2016. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THE APPEAL FILED BY THE ASSESSEE IS ARISING FROM T HE ORDER DATED 04.09.2013 PASSED BY THE LEARNED CIT (A)-II, JAIPUR FOR THE A. Y. 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. UNDER THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT (A)- II, JAIPUR HAS ERRED IN NOT DECLARING THE REASSESSM ENT PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961 AS ILLEGAL AND WITHOUT AUTHORITY OF LAW. 2 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT 2. UNDER THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT (A)- II, JAIPUR HAS ERRED IN UPHOLDING THE DISALLOWANCE OF THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 10B OF RS. 26,40,342/- AND REASSESSED BY LD. AO AT RS. 3,48,584/- UNDER ASSESSMENT PROCEE DINGS U/S 147/143(3) OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE FILED THE RETURN OF INCOME ON 29.10 .2007 DECLARING TOTAL INCOME OF RS. 43,91,220/-. THE CASE WAS SELECTED FOR SCRU TINY ASSESSMENT AND THEREAFTER THE ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED T HEREBY A TOTAL INCOME OF RS. 43,91,220/- WAS ASSESSED. 2.1. IT HAS BEEN NOTICED THAT THE ASSESSEE HAS CLAI MED EXCESS EXEMPTION UNDER SECTION 10B OF IT ACT, 1961 FOR RS. 22,98,485/-. CO NSIDERING THIS ASPECT, A NOTICE UNDER SECTION 147/148 WAS ISSUED ON 23.3.2012 WHERE IN IT IS MENTIONED AS UNDER :- WHEREAS I HAVE REASONS TO BELIEVE THAT YOUR INCOM E CHARGEABLE TO TAX FOR THE ASSESSMENT YEAR 2007-08 HAS ESCAPED ASS ESSMENT WITHIN THE MEANING OF SECTION 147 OF THE INCOME TAX ACT, 1 961. AFTER RECEIPT OF THE NOTICE, THE ASSESSEE HAS REQUE STED THE AO TO PROVIDE THE REASONS TO BELIEVE. THE AO VIDE LETTER DATED 09.10 .2012 HAS PROVIDED THE REASONS TO BELIEVE AS UNDER :- THE ASSESSEE HAS CLAIMED EXEMPTION U/S 10B OF RS. 26,40,362/- IN RESPECT OF STPI UNIT HOWEVER, NO SEPARATE PROFIT AN D LOSS HAVE BEEN FILED BY ASSESSEE CLAIM U/S 10B WAS MADE ON THE BAS IS OF AUDIT CERTIFICATE IN FORM 56G, HOWEVER NO WORKING SHEET I S SUBMITTED BY ASSESSEE. ON THE BASIS OF FIGURES & DETAILS CORRECT WORKING OF EXEMPTION U/S 10B WORKS OUT AS UNDER : TOTAL TURNOVER RS. 9,11,66,533/- TOTAL TURNOVER OF ELIGIBLE BUSINESS RS. 46,99 ,000/- TOTAL PROFIT OF BUSINESS PROFIT ATTRIBUTABLE TO ELIGIBLE BUSINESS RS. 66,32,853/- 6632853 X 4699000 = RS. 3,41,877/- 91166533 3 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT THUS EXEMPTION U/S 10B HAS BEEN EXCESSIVELY ALLOW ED BY RS.22,98,485/- . AFTER RECEIPT OF THE NOTICE, THE LD. A/R OF THE ASS ESSEE HAS FILED HIS WRITTEN SUBMISSION AND HAS RAISED THE ISSUE OF LEGALITY OF THE NOTICE UNDER SECTION 148 BECAUSE AS PER THE ASSESSEE THERE IS A CHANGE OF OP INION. BESIDES THAT, ON MERITS, IT WAS SUBMITTED THAT AS PER THE REASONS SUPPLIED, SEC TION 10B HAS WRONGLY BEEN APPLIED AND THE FORMULA GIVEN BY THE REVENUE IN THE REASONS TO BELIEVE WAS INCORRECT. THE REASONING GIVEN BY THE ASSESSEE IN THE REPLY IS REPRODUCED AS UNDER :- 5) IT IS SUBMITTED THAT THE ASSESSEE COMPANY HAD B EEN GRANTED REGISTRATION UNDER STPI AS 100% EOU UNDERTAKING FOR DEVELOPMENT OF COMPUTER SOFTWARE. NECESSARY DOCUMENTARY EVIDENCES IN FORM OF REGISTRATION CERTIFICATE, PERFORMANCE REPORT ETC. W ERE EARLIER SUBMITTED AND ARE ONCE AGAIN ENCLOSED AS PER ANNEXURE-1.THE A SSESSEE COMPANY HAD THIS UNDERTAKING WHICH IS ELIGIBLE FOR DEDUCTIO N/S 10B OF THE ACT AND ACCORDINGLY THE PROFIT FROM EXPORT OF THIS UNDE RTAKING WAS DULY CLAIMED AS DEDUCTION U/S 10B. IT IS ALSO STATED THA T THE QUANTUM OF EXPORT SALE UNDER STPI AND EXPENSES THEREON ARE DUL Y DISCLOSED SEPARATELY ON FACE OF P & L A/C. COPY OF RELEVANT EXTRACTS OF AUDITED P & L IS ENCLOSED AS PER ANNEXURE-2 FOR YOUR KIND PER USAL & RECORDS. IT IS ALSO SUBMITTED THAT TOTAL EXPENSES WERE TO THE TUNE OF RS. 17,65,264/- AND SUM OF RS. 17,32,117/- HAS BEEN DULY DISCLOSED IN SCHEDULE O OF FINANCIAL STATEMENT AND BALANCE AMOUNT OF RS. 33,14 7/- IS ON ACCOUNT OF DEPRECIATION FOR WHICH ALSO A SUITABLE NOTE HAS BEEN MADE IN RELEVANT SCHEDULE OF FIXED ASSETS. IT IS, THEREFORE , SUBMITTED THAT ENTIRE FIGURES OF SALE, EXPENSES & PROFIT WERE AVAILABLE A ND DULY DISCLOSED ON FINANCIAL STATEMENTS FOR CALCULATION OF EXEMPTION U /S 10B OF THE ACT. 6) IT IS SUBMITTED THAT THE ASSESSEE COMPANY HAD CL AIMED THE DEDUCTION AS PER PROVISION OF SECTION 10B OF THE AC T. AS PER PROVISION OF SUB SECTION 4 OF SECTION 10B, THE PROFIT DERIVED FROM EXPORT MEANS THE PROFIT DERIVED FROM EXPORT OF ARTICLES OR THIN GS OR COMPUTER SOFTWARE SHALL BE THE AMOUNT WHICH BEARS TO THE PRO FITS OF THE BUSINESS OF THE UNDERTAKING, THE SAME PROPORTION AS THE EXPO RT TURNOVER IN RESPECT OF SUCH ARTICLES OR THINGS OR COMPUTER SOFT WARE B EARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE UN DERTAKING. PRIOR TO THE AMENDMENT MADE ON 01.04.2001 IN THIS S ECTION THE PROFIT MEANT THE AMOUNT WHICH BEARS TO THE PROFITS OF THE BUSIN ESS, THE 4 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT SAME PROPORTION AS THE EXPORT TURNOVER IN RESPECT O F SUCH ARTICLES OR THINGS OR COMPUTER SOFTWARE BEARS TO THE TOTAL TURN OVER OF THE BUSINESS CARRIED ON BY THE ASSESSEE. AS PER THE EXISTING PROVISION OF SEC. 10B, RELEVANT TO ASSESSMENT YEAR IN QUESTION, THE PROFIT MEANS THE PROFIT OF THE UND ERTAKING IN PROPORTION OF THE PROFIT TO TOTAL TURNOVER OF THE UNDERTAKING AND NOT TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE ASSESSEE . IN OTHER WORDS IT CAN BE SAID THAT THE DEDUCTION UNDER THIS SECTION I S QUA BUSINESS AND NOT QUA ASSESSEE. THEREFORE THE ASSESSEE COMPANY H AD RIGHTLY CLAIMED THE DEDUCTION OF THE PROFIT OF THE UNDERTAK ING AT RS. 26,40,362/- I.E. THE ONLY PROFIT OF THE 100% EOU TO TOTAL BUSINESS CARRIED ON BY THE UNDERTAKING. EXTRACT OF RELEVANT AMENDMENT IN THE IT ACT IN FORM OF NOTES ON CLAUSES AND MEMORANDUM EXPLAINING THE PROVISION OF ACT DULY CLARIFYING THE POSITION ARE ALSO ENCLOSED AS PER AN NEXURE-3 FOR YOUR KIND PERUSAL & RECORDS. 7) IT IS SUBMITTED THAT THE THEORY OF PROPORTION WO ULD BE APPLICABLE ONLY IF THE LOCAL SALES WERE MADE FROM THE STPI UNI T. THE PROFITS OF THE BUSINESS IN THE GIVEN CONTEXT WOULD MEAN THE PROFIT OF THE BUSINESS CARRIED ON BY THE UNDERTAKING TO WHICH THE PROVISIO N APPLY I.E. STPI UNIT. CIRCULAR NO. 794 DATED 09.08.2000 ISSUED BY C BDT FURTHER CLARIFIES THE POSITION. (245 ITR-ST-21). THE AFORESAID CIRCULAR AT PARA 15.5 HAS CLARIFIED T HAT EXPORT TURNOVER & TOTAL TURNOVER FOR PURPOSE OF SECTION 10A AND 10B S HALL BE OF THE UNDERTAKING LOCATED IN SPECIFIED ZONES OR 100% EOU AS THE CASE MAY BE AND THIS SHALL NOT HAVE ANY MATERIAL RELATIONSHI P WITH THE OTHER BUSINESS OF THE ASSESSEE OUTSIDE THESE ZONES OR UNI TS FOR THE PURPOSE OF THIS PROVISION. COPY OF RELEVANT EXTRACT AT PAGE 35 & 36 OF CIRCULARS ARE ENCLOSED FOR YOUR KIND PERUSAL & RECORDS AS PER ANNEXURE-4. THE AO HAS CONSIDERED THE REPLY AND AFTER CONSIDERI NG THE REPLY HAS HELD THAT THE OBJECTION OF THE ASSESSEE FOR REOPENING WAS NOT SUS TAINABLE AND ON MERIT IT WAS HELD THAT THE ASSESSEE HAS WRONGLY CLAIMED THE DEDUCTION OF RS. 22,91,778/- IN THE RETURN OF INCOME AND, THEREFORE, THE ADDITION OF RS . 22,91,778/- WAS MADE TO THE INCOME OF THE ASSESSEE. 5 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT 3. FEELING AGGRIEVED BY THE ORDER OF AO, THE ASSESS EE HAS CHALLENGED THE ORDER PASSED BY THE AO BEFORE LD. CIT (A). THE LD. CIT ( A) AFTER CONSIDERING THE JUDGMENT REFERRED BY THE ASSESSEE HAS CONCLUDED THAT REOPENI NG MADE BY THE AO WAS IN ACCORDANCE WITH LAW AND HAS SUMMARIZED IN PARA 2.3 OF HIS ORDER AS UNDER :- 2.3. I HAVE CONSIDERED THE FACTS OF THE CASE; ASSE SSMENT ORDER AND APPELLANTS WRITTEN SUBMISSION. ASSESSING OFFICER R EOPENED THE ASSESSMENT ON THE GROUND THAT APPELLANT CLAIMED EXC ESS DEDUCTION U/S 10B. IT IS NOT IN DISPUTE THAT REOPENING IS DONE W ITHIN FOUR YEARS AND THEREFORE PROVISO TO SECTION 147 IS NOT APPLICABLE. ASSESSING OFFICER RECORDED REASONS FOR REOPENING THE ASSESSMENT CLEAR LY MENTIONING THE FACT OF INCOME ESCAPING ASSESSMENT. APPELLANT ARGUE D THAT ON THE SAME FACTS ASSESSING OFFICER REOPENED THE ASSESSMEN T WHICH AMOUNTS TO CHANGE OF OPINION WHICH IS NOT PERMITTED AS PER JUDICIAL DECISIONS. HOWEVER APPELLANT DID NOT EXPLAIN AS TO HOW AND WHE RE ASSESSING OFFICER EXPRESSED HIS OPINION IN ALLOWING DEDUCTION IN ORIGINAL ASSESSMENT. IT IS HELD BY HONOURABLE GUJARAT HIGH C OURT IN THE RECENT DECISION IN THE CASE OF GALA GYMKHANA LTD. THAT UNL ESS ASSESSING OFFICER EXPRESSED HIS OPINION, IT CANNOT BE SAID TH AT REOPENING OF ASSESSMENT WAS ON ACCOUNT OF CHANGE OF OPINION. AS AGAINST THIS, DECISIONS RELIED UPON BY THE APPELLANT ARE ON DIFFE RENT FACTS. RESPECTFULLY FOLLOWING THIS DECISION WHICH IS CLEAR LY APPLICABLE IN THE FACTS OF THE APPELLANTS CASE, REOPENING MADE BY TH E ASSESSING OFFICER IS HELD TO BE AS PER LAW AND ACCORDINGLY THIS GROUN D IS DISMISSED. ON MERITS THE LD. CIT (A) HAS UPHELD THE ORDER PASS ED BY THE AO AND HAS CONCLUDED THAT THE AO WAS JUSTIFIED IN RE-COMPUTING THE ELIGI BLE DEDUCTION UNDER SECTION 10B BY APPLYING THE FORMULA GIVEN IN SUB-SECTION (4) TO SE CTION 10B. 4. FEELING AGGRIEVED BY THE ORDER PASSED BY LD. CIT (A), THE ASSESSEE IS BEFORE US. 5. AT THE OUTSET, THE LD. A/R FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE REOPENING OF THE ASSESSMENT AND FOR THAT PURPOSE, T HE LD. A/R HAS RELIED UPON THE JUDGMENT PASSED BY HONBLE DELHI HIGH COURT IN THE MATTER OF REPLIKA PRESS PVT. LTD. VS. DCIT, 218 TAXMAN 399 (DELHI) AND HAS ALSO RELIE D UPON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE MATTER OF MUKESH M ODI & ORS. VS. DCIT, 366 ITR 418 6 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT (RAJ.). ON MERITS, IT WAS SUBMITTED THAT THE AO HAS APPLIED THE OLD LAW WHICH WAS SUBSTITUTED BY THE NEW LAW IN THE YEAR 2001 AND IT WAS SUBMITTED THAT THE CALCULATION GIVEN BY THE AO AND CONFIRMED BY LD. CI T (A) WERE NOT VALID. FEELING AGGRIEVED BY THE ABOVE SAID ILLEGALITY OF THE AO AN D LD. CIT (A) SUBMITTED THAT THE ORDERS OF THE LOWER AUTHORITIES WERE REQUIRED TO BE SET ASIDE. 6. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED THA T THE REOPENING HAS BEEN DONE BY THE AO ON THE BASIS OF INCOME ESCAPED AS ST IPULATED UNDER SECTION 147 OF THE ACT AND, THEREFORE, THE AO HAS RIGHTLY REOPENED THE CASE. FOR THAT PURPOSE, THE LD. D/R RELIED UPON THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF SWORD GLOBAL INDIA (P) LTD. VS. ACIT, 60 TAXMANN.COM 73 ( MADRAS). HE HAS DRAWN OUR ATTENTION TO PARA 23 OF THE SAID ORDER WHICH IS REP RODUCED HEREIN BELOW FOR THE SAKE OF CONVENIENCE :- 23. IN THE PRESENT CASE, WHAT EXACTLY THE PETITION ER WANTS TO DEMONSTRATE THAT ALREADY ALL THE DETAILS REGARDING THE INCOME WERE DISCLOSED AND AFTER CONSIDERING THE SAME, THE ASSES SING OFFICER HAS CONCLUDED IN FAVOUR OF THE PETITIONER AND AGAIN ON THE SAME MATERIAL, IT IS NOT APPROPRIATE FOR THE ASSESSING OFFICER TO PRO CEED WITH THE REASSESSMENT PROCEEDINGS WHICH WOULD AMOUNT TO CHA NGE OF OPINION. IN SUCH CIRCUMSTANCES, THE CONCEPT HIGHLIGHTED IN T HE ABOVE DECISION WOULD SQUARELY APPLY TO THE VERSION OF THE PETITION ER, THAT HAVING WILLFULLY MADE FALSE OR UNTRUE STATEMENTS AT THE TI ME OF ORIGINAL ASSESSMENT AND WHEN THAT FALSITY COMES TO NOTICE, I T IS NOT FAIR ON THE PART OF THE PETITIONER TO TURN AROUND AND SAY YOU ACCEPTED MY LIE, NOW YOUR HANDS ARE TIED AND YOU CAN DO NOTHING. ON MERIT, THE LD. D/R HAS ALSO DRAWN OUR ATTENTION TO THE ORDER PASSED BY THE AO AND THE FORMULA APPLIED. IT WAS POINTED OUT THAT A S PER SECTION 10B(4) THE FORMULA WHICH IS REQUIRED TO BE APPLIED IS AS UNDER :- PROFIT OF THE BUSINESS OF UNDERTAKING X EXPORT TURNOVER TOTAL TURNOVER 66,32,852 X 46,99,000 = RS. 3,48,584 8,94,12,499 7 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT THE LD. D/R HAS SUBMITTED THAT THE CALCULATIONS WER E MADE AS PER NEW LAW AND NOT AS PER THE OLD LAW. 7. WE HAVE HEARD THE RIVAL ARGUMENTS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE FIRST GROUND OF APPEAL CHALLENGED BEFO RE US WAS THE LEGALITY OF THE REOPENING BY THE AO PURSUANT TO THE NOTICE DATED 23 .3.2012. FOR THAT PURPOSE, THE LD. A/R HAS DRAWN OUR ATTENTION TO THE REPLY SUBMIT TED BY THE ASSESSEE IN RESPONSE TO ASSESSMENT PROCEEDINGS U/S 143(3) AS UNDER :- (9) THE DETAILS OF EXPORT EXPENSES UNDER STPI HAVE BEEN PROVIDED AT SCHEDULE O OF THE FINANCIAL STATEMENTS. NAME O F VARIOUS PERSONS ALONG WITH NATURE OF EXPENSES ARE SUBMITTED AT ANNEXURE-5. (25) THE CERTIFICATE AND DETAILS RELATING TO THE CL AIM BY THE ASSESSEE COMPANY U/S 10B OF THE IT ACT IS ENCLOSED HEREWITH AT ANNEXURE-21. THE LD. A/R HAS SUBMITTED BEFORE US IN VIEW OF THE SPECIFIC REPLY GIVEN BY THE ASSESSEE, THE REOPENING OF THE ASSESSMENT IS NOT CO RRECT. WE WOULD LIKE TO REPRODUCE SOME OF THE JUDGMENT ON THIS ISSUE DEALIN G WITH THE REOPENING IN THE MATTER OF KELVINATOR INDIA LTD, 329 UTR 561 (DELHI) , CIT VS.GABRIEL INDIA LTD., 203 ITR 1089 (BOM.) AND HINDUSTAN LEVER LTD. VS. ACIT, 268 ITR 332 (BOM.) AND ALSO THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE MAT TER OF EICHER LTD. (2007) 294 ITR 310 AND HONBLE MUMBAI HIGH COURT IN THE MATTE R OF GKN SINTER METALS LTD VS. MS RAMAPRIYA RAGHAVAN, ACIT {2015} 55 TAXM ANN.COM 438( BOMBAY). ALL THE JUDGMENTS REFERRED HEREIN ABOVE WERE REFERRED B Y THE HONBLE MUMBAI HIGH COURT IN THE MATTER OF GKN SINTER METALS LTD. (SUPR A) AND THE HONBLE HIGH COURT IN PARA 13, 14 & 15 HAS HELD AS UNDER :- 8 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT 13. THE LD A.R INVITED OUR ATTENTION TO THE DECI SION RENDERED BY HONBLE DELHI HIGH COURT IN THE CASE OF KELVINATOR INDIA LT D (320 ITR 561),WHEREIN THE DELHI HIGH COURT HAS HELD THE ASSE SSMENT CANNOT BE REOPENED ON THE BASIS OF CHANGE OF OPINION. HE ALSO RELIED UPON THE DECISION RENDERED BY THE HONBLE JURISDICTIO NAL BOMBAY HIGH COURT IN THE CASE OF CIT VS GABRIEL INDIA LTD 20 3 ITR 1089 (BOM) AND ALSO IN THE CASE OF HINDUSTAN LEVER LT D VS ACIT 268 ITR 332(BOM). IN THE CASE OF HINDUSTAN LEVER LT D (SUPRA), THE HON. HIGH COURT HAS ELABORATELY DISCUSSED THE SCOP E AND AMBIT OF SECTIONS 147 & 148 AND HAS CONCLUDED IN THE FOLLOWI NG MANNER: THE REASONS RECORDED BY THE ASSESSING OFFICER NOWH ERE STATED THEREWAS FAILURE ON THE PART OF THE ASSESSEE TO DIS CLOSE FULLY AND TRULY ALLMATERIAL FACTS NECESSARY FOR THE ASSESSMENT OF THAT ASSESSMENT YEAR. THE REASONS ARE REQUIRED TO BE READ AS THEY W ERE RECORDED BY THE ASSESSING OFFICER. NO SUBSTITUTION OR DEL ETION IS PERMISSIBLE. NO ADDITIONS CAN BE MADE TO THOSE REASONS. N O INFERENCE CAN BE ALLOWED TO BE DRAWN BASED ON REASONS NOT RECORDED. IT IS FOR THE ASSESSING OFFICER TO DISCLOSE AND OPE N HIS MIND THROUGH REASONS RECORDED BY HIM. HE HAS TO SPEAK THROUGH H IS REASONS. IT IS FOR THE ASSESSING OFFICER TO REACH TO THE CONCLUSIO N AS TO WHETHER THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS AS SESSMENT FOR THE CONCERNED ASSESSMENT YEAR. IT IS FOR THE ASSESSING OFFICER TO FORM HIS OPINION. IT IS FOR HIM TO PUT HIS OPINION O N RECORD IN BLACK AND WHITE. THE REASONS RECORDED SHOULD BE CLEAR A ND UNAMBIGUOUS AND SHOULD NOT SUFFER FROM ANY VAGUENESS. THE REASONS RECORDED MUST DISCLOSE HIS MIND. REASONS ARE THE MANIF ESTATIONS OF MIND OF THE ASSESSING OFFICER. THE REASONS RECORDED SH OULD BE SELF- EXPLANATORY AND SHOULD NOT KEEP THE ASSESSEE GU ESSING FOR THE REASONS. REASONS PROVIDE LINK BETWEEN CONCLUSIO N AND EVIDENCE. THE REASONS RECORDED MUST BE BASED ON EVIDENC E. THE ASSESSING OFFICER, IN THE EVENT OF CHALLENGE TO THE REASO NS, MUST BE ABLE TO JUSTIFY THE SAME BASED ON MATERIAL AVAILABLE ON RECORD. HE MUST DISCLOSE IN THE REASONS AS TO WHICH FACT OR MATERIAL WAS NOT DISCLOSED BY THE ASSESSEE FULLY AND TRULY NEC ESSARY FOR ASSESSMENT OF THAT ASSESSMENT YEAR, SO AS TO ESTABLISH VITAL LINK BETWEEN THE REASONS AND EVIDENCE. THAT VITAL LINK I S THE SAFEGUARD AGAINST ARBITRARY REOPENING OF THE CONCLUDED A SSESSMENT. THE REASONS RECORDED BY THE ASSESSING OFFICER CAN NOT BE 9 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT SUPPLEMENTED BY FILING AFFIDAVIT OR MAKING OR AL SUBMISSION, OTHERWISE THE REASONS WHICH WERE LACKING IN MATERIAL PARTICULARS WOULD GET SUPPLEMENTED, BY THE TIME THE MATTER REAC HES THE COURT, ON THE STRENGTH OF AFFIDAVIT OR ORAL SUBMISSION ADVANC ED . THE LD A.R ALSO RELIED UPON THE JUDGMENT OF THE BOMBAY HIGH COURT I N THE CASE OF BHOR INDUSTRIES LTD VS ACIT 267 ITR 161 (B OM) WHEREIN THE HON.BOMBAY HIGH COURT HAS HELD AS UNDER: BY VIRTUE OF THE PROVISO TO SECTION 147 NO ACTION CAN BE TAKEN FOR REOPENING AFTER FOUR YEARS UNLESS THE ASSESSING OFF ICER HAS REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISC LOSE FULLY AND TRULY ALL MATERIAL FACTS. EXPLANATION 2 TO SECTION 147 IS REQ UIRED TO BE READ WITH SECTION 147 IN ITS ENTIRETY INCLUDING THE PROVISO. THAT, IF ONE READS EXPLANATION 2 TO SECTION 147 INCLUDING THE PR OVISO THEN IT IS CLEAR THAT IN CASES WHERE THE DEPARTMENT REOP ENS THE ASSESSMENT WITHIN A PERIOD OF FOUR YEARS, IT CAN DO SO ON THE ROUND OF INCOME HAVING ESCAPED ASSESSMENT. HOW EVER, IN CASES OF REOPENING AFTER FOUR YEARS, THE ASSESSING OF FICER MUST HAVE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSM ENT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO DISCL OSE FULLY AND TRULY ALL MATERIAL FACTS. EXPLANATION 2 CANNOT BE READ WITHOUT READING THE PROVISO TO SECTION 147. EXPLANATION 2( C) HA S TO BE READ WITH SECTION 147 INCLUDING THE PROVISO AND, IF SO READ, THE ABOVE DICHOTOMY WOULD BE CLEARLY SPELT OUT. 14. THE CIT(A), WHILE UPHOLDING THE REOPENING OF TH E ASSESSMENT ORDER, HAD EXPRESSED THE VIEW THAT THERE IS NO DISCUSSION IN THE ORIGINAL ASSESSMENT ORDER FOR ALLOWING THE IMP UGNED EXPENDITURE. THE LD. A.R SUBMITTED THAT WHEN AN ASSESSMENT IS COMPLETED U/S 143(3) OF THE ACT , IT IS PRESUMED THAT THE A SSESSING OFFICER HAS APPLIED HIS MIND TO THE ISSUE AND THAT THE ASSESSING OFFICER SHOULD NOT RESORT TO PROVISIONS OF SECTION 14 7 AND 148 OF THE ACT. IN THIS REGARD, THE LD A.R RELIED UPON THE JUDGEMENT OF THE DELHI HIGH COURT IN THE MATTER OF EICHE R LTD (2007)294 ITR 310 WHEREIN, THE DELHI HIGH COURT AFTER REFE RRING TO THE JUDGEMENT PASSED BY THE DIVISION BENCH OF THE PUNJA B & HARYANA HIGH COURT HAS LAID DOWN THE RATIO IN THE FOLLOWING MANN ER: APPLYING THE PRINCIPLES LAID DOWN BY THE FULL BENCH OF TH IS COURT AS WELL AS THE OBSERVATIONS OF THE PUNJAB AND HARYANA HIGH COURT , WE FIND THAT IF THE ENTIRE MATERIAL HAD BEEN PLACED BY THE A SSESSEE BEFORE THE 10 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT ASSESSING OFFICER AT THE TIME WHEN THE ORIGIN AL ASSESSMENT WAS MADE AND THE ASSESSING OFFICER APPLIED HIS MIND TO THAT MATERIAL AND ACCEPTED THE VIEW CANVASSED BY THE ASSESSEE, THEN MERELY BECAUSE HE DID NOT EXPRESS THIS IN THE ASSES SMENT ORDER, THAT BY ITSELF WOULD NOT GIVE HIM A GROUND TO CO NCLUDE THAT INCOME HAS ESCAPED ASSESSMENT AND, THEREFORE, THE ASS ESSMENT NEEDED TO BE REOPENED. ON THE OTHER HAND, IF THE A SSESSING OFFICER DID NOT APPLY HIS MIND AND COMMITTED A LAPSE, TH ERE IS NO REASON WHY THE ASSESSEE SHOULD BE MADE TO SUFFER THE CONSEQUEN CES OF THAT LAPSE. HE FURTHER SUBMITTED THAT IDENTICAL VIEWS H AVE BEEN EXPRESSED BY HONBLE JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF IDEA CELLULAR LTD (301 ITR 407) AND ALSO IN THE CASE OF ARONI CHE MICALS LTD VS. ACIT (367 ITR 405). 15. THE LD.AR FOR THE ASSESSEE FURTHER RELIED UPON THE JUDGMENT OF GKN SINTER METALS LTD VS. MS RAMAPRIYA RAGHAV AN, ACIT {2015}55 TAXMANN.COM 438( BOMBAY) AND SUBMITTED THAT THE FACTS OF PRESENT CASE ARE SIMILAR TO THE FACTS TH AT PREVAILED IN THE ABOVE SAID CASE. IN THE CASE BEFORE HONBLE BOM BAY HIGH COURT, THE ASSESSING OFFICER ORIGINALLY ALLOWED DEDUCT ION U/S 80-IA/ 80-IB OF THE ACT. LATER HE REOPENED THE ASSESSMENT ON THE REASONING THAT THERE WAS INAPPROPRIATE ALLOCATION OF EXP ENSES BETWEEN THE UNITS ELIGIBLE FOR DEDUCTION. THE HON'BLE BOMBAY HIGH COURT HELD THAT REOPENING WAS ON CHANGE OF OPINION AND THE SAME IS NOT PERMISSIBLE. THE RELEVANT OBSERVATIONS MADE BY HONBLE BOMBAY HI GH COURT ARE EXTRACTED BELOW:- 13. IN THE PRESENT FACTS, THE PETITIONER HA D ALONG WITH ITS RETURN OF INCOME FILED ITS COMPUTATION OF INCOME WHEREIN CLAIM FOR DEDUCTION UNDER SECTION 801A /IB OF THE ACT WAS MADE. BESIDES THE AUDITOR'S CERTIFICAT E AS REQUIRED UNDER SECTION 80IA(8) OF THE ACT TO CLAIM TO DEDUCTION WAS ALSO FILED ALONG WITH A NOTE INDICATING THE BASIS OF ALLOCATION OF EXPENDITURE AMONGST ITS THREE MA NUFACTURING UNITS WAS ALSO FILED. THESE WERE ALL PRIMARY DOCUMENTS WHICH WOULD NOT NORMALLY ESCAPE EXAMINATION DU RING THE SCRUTINY PROCEEDINGS. THIS IS ALSO EVIDENT FRO M THE FACT THAT DURING ASSESSMENT PROCEEDINGS, THE ASSESSI NG OFFICER HAD BY LETTER DATED 27 TH DECEMBER, 2004 CALLED UPON THE PETITIONER TO FURNISH DETAILS WITH REGARD TO ITS CLAIM FOR DEDUCTION UNDER SECTION 801A/IB OF THE ACT IN CLUDING THE 11 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT METHOD/MANNER OF ALLOCATION OF EXPENDITURE AMON GST ITS THREE MANUFACTURING UNITS. THE PETITIONER BY I TS LETTER DATED 25TH JANUARY, 2005 SUBMITTED VARIOUS DETAILS O F ALLOCATION OF EXPENSES SUPPORTING ITS NOTE FILED ALONG W ITH THE RETURN OF INCOME THAT THE EXPENDITURE HAD BEEN ALLOC ATED ACTUAL BASIS, TURN OVER BASIS AND TIME SPENT BASIS AMONGST THE THREE MANUFACTURING UNITS. THE AFORESAID ALLOCA TION OF EXPENSES ON DIFFERENT BASIS WAS ON THE BASIS OF THE NATURE OF EXPENDITURE. THE ASSESSING OFFICER WAS SATISFIED WITH THE PETITIONER'S RESPONSE AND CONSEQUENTL Y IN THE ASSESSMENT ORDER DATED 9TH MARCH, 2005 UNDER SECTION 143(3) OF THE ACT ACCEPTED THE PETITIONER'S CLAIM FOR DEDUCTION UNDER SECTION80LA/LB OF RS. 2.08 CR ORES. THIS ESTABLISHES THAT AN OPINION WAS FORMED IN RE SPECT OF ALLOCATION OF EXPENSES AMONGST THE THREE MANUF ACTURING UNITS FOR DEDUCTION UNDER SECTION 80LATLS OF THE ACT WHILE PASSING AN ORDER OF ASSESSMENT ON 9TH MARCH, 2005. 14. HOWEVER, MR. CHHOTRARY, LEARNED COUNSEL A PPEARING FOR THE REVENUE SUBMITS THAT THERE HAS BEEN NO FORMATION OF OPINION ON ALLOCATION OF EXPENDITURE AMONGST THE THREE MANUFACTURING UNITS BY THE ASSESSING OFFICER AS THE ASSESSMENT ORDER DATED 9TH MARCH, 2005 PASSED UNDER SECTION 143(3) OF THE ACT CONTAINS NO DISCUS SION ON THE SAME. ACCORDING TO THE REVENUE, IT COULD ONLY BE WHEN THE ASSESSMENT ORDER CONTAINS DISCUSSION WITH REGARD TO PARTICULAR CLAIM CAN IT BE SAID THAT THE ASS ESSING OFFICER HAD FORMED AN OPINION WITH REGARD TO THE CLA IM MADE BY THE ASSESSEE. THIS COURT IN IDEA CELLULAR LTD . V. DEPUTY COMMISSIONER OF INCOME TAX MANU/MH/0169/2008 : 301 ITR 407 HAS EXPRESSLY NEGATIVED ON IDENTICAL CONTENTION ON BEHALF OF THE REVENUE. THE COURT HELD THAT O NCE ALL THE MATERIAL WAS PLACED BEFORE THE ASSESSING OFFIC ER AND HE CHOSE NOT TO REFER TO THE DEDUCTION/CLAIM WHI CH WAS BEING ALLOWED IN THE ASSESSMENT ORDER, IT COULD NOT BE CONTENDED THAT THE ASSESSING OFFICER HAD NOT APPLIED HIS MIND WHILE PASSING THE ASSESSMENT ORDER. MOREO VER IN THIS CASE, IT IS EVIDENT FROM THE LETTER DATED 6 TH AUGUST, 2007 ADDRESSED BY THE ASSESSING OFFICER TO THE PET ITIONER CONTAINING THE REASONS RECORDED FOR ISSUING T HE IMPUGNED NOTICE ALSO RECORD THE FACT THAT DURING THE REGULAR 12 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT ASSESSMENT PROCEEDINGS, THE PETITIONER HAS BEE N ASKED TO FURNISH DETAILS IN SUPPORT OF THE CLAIM FOR EXEMPTION UNDER SECTION 80LATLS OF THE ACT. THE LETTER FURTH ER RECORDS THAT THE DETAILS SOUGHT FOR WERE FURNISHED AND IT IS NOW OBSERVED THAT THERE HAS BEEN A DIS-PROPORTIONA TE DISTRIBUTION OF EXPENSES BETWEEN VARIOUS UNITS BELONGING TO THE PETITIONER FOR CLAIMING DEDUCTION UNDER SE CTION 80LA/LB OF THE ACT. THIS IS A FURTHER INDICATION OF THE FACT THAT THE ASSESSING OFFICER HAD DURING THE REGULAR ASSES SMENT PROCEEDINGS FOR ASSESSMENT YEAR 2002-03 SOUGHT INFORMATION IN RESPECT OF THE ALLOCATION OF EXPENSES AND THE EXPLANATION OFFERED BY THE PETITIONER WAS FOUND TO BE SA TISFACTORY. THIS IS EVIDENT FROM QUERY DATED 27TH DECEMBER, 20 04 AND THE PETITIONER'S RESPONSE TO THE SAME ON 25 TH JANUARY, 2005 EXPLAINING THE MANNER OF DISTRIBUTION OF COMMO N EXPENSES FOR DELAYING THE PROCESS OF CLAIMING DEDUCTION UNDER SECTION 80LA/IB OF THE ACT. ALL THIS WOULD I NDICATE THAT ASSESSING OFFICER HAD FORMED AN OPINION WHILE PASSING THE ORDER DATED 9TH MARCH, 2005. THIS COURT IN ARONI COMMERCIALS LTD. V. ASSISTANT COMMISSIONER OF INCOME TAX MANU/MH/1838/20140: 367 ITR 405 HAD OCCASION TO CONSIDER SOMEWHAT SIMILAR SUBMISSION MADE BY THE REVENUE AND NEGATIVED THE SAME BY HOLDING THA T WHEN A QUERY HAS BEEN RAISED WITH REGARD TO A PARTI CULAR ISSUE DURING THE REGULAR ASSESSMENT PROCEEDINGS, IT MUST FOLLOW THAT THE ASSESSING OFFICER HAD APPLIED HIS MI ND AND TAKEN A VIEW IN THE MATTER AS IS REFLECTED IN THE ASSESSMENT ORDER. BESIDES, THE MANNER IN WHICH AN ASSESS ING OFFICER WOULD DRAFT/FRAME HIS ORDER IS NOT WITHIN THE CONTROL OF AN ASSESSEE. MOREOVER, IF EVERY CONTENTION RAISED BY THE ASSESSEE WHICH EVEN IF ACCEPTED IS TO BE REF LECTED IN THE ASSESSMENT ORDER, THEN AS OBSERVED BY THE GUJ ARAT HIGH COURT IN CIT V. NIRMA CHEMICALS LTD. MANU/GJ/ 0136/20080: 305 ITR 607, THE ORDER WOULD RESULT INTO AN EPIC TOME. BESIDES, IT WOULD BE IMPOSSIBLE FOR THE ASSES SING OFFICER TO COMPLETE ALL THE ASSESSMENTS WHICH HAVE TO UN DER GONE SCRUTINY AT ITS HAND. IN THE ABOVE VIEW, IT IS CLEAR THAT ONCE A QUERY HAS BEEN RAISED DURING THE ASSE SSMENT PROCEEDINGS AND THE PETITIONER HAS RESPONDED TO THE QUERY TO THE SATISFACTION OF THE ASSESSING OFFICER AS IS EVIDENT FROM THE FACT THAT THE ASSESSMENT ORDER DATE D 9 TH MARCH, 13 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT 2005 ACCEPTS THE PETITIONER'S CLAIM FOR DEDUC TION UNDER SECTION 80LA/IB OF THE ACT. IT MUST FOLLOW THAT THERE IS DUE APPLICATION OF MIND BY THE ASSESSING OFFI CER TO THE ISSUE RAISED. 15. THEREFORE, AS THERE IS A CHANGE OF OPIN ION IN ISSUING THE IMPUGNED NOTICE HAVING REGARD TO THE OPIN ION FORMED WHILE PASSING THE ASSESSMENT ORDER UNDER SECTI ON 143(3)OF THE ACT, THE ASSESSING OFFICER WOULD CEASE TO HAVE ANY REASON TO BELIEVE AS HELD BY THE SUPREME COURT IN KELVINATOR OF INDIA (SUPRA). MOREOVER, THE POWER TO REASSESS UNDE R SECTION 147/148 OF THE ACT IS NOT A POWER TO REVIEW AN ORDE R OF ASSESSMENT PASSED UNDER SECTION 143(3) OF THE ACT. 7.1. NOW IN THE LIGHT OF THE LAW LAID DOWN BY THE H ONBLE MUMBAI HIGH COURT AFTER CONSIDERING THE VARIOUS JUDGMENTS, WE HAVE TO DECID E WHETHER THE REASSESSMENT PROCEEDINGS INITIATED BY THE AO ARE LIABLE TO BE CA NCELLED FOR THE REASON THAT THE PROCEEDINGS UNDER SEC. 147 OF THE ACT WERE INITIATE D MERELY ON THE CHANGE OF OPINION. WE NOTICED, THOUGH THERE ARE SPECIFIC REPL Y GIVEN AS REPRODUCED HEREIN ABOVE IN RESPECT OF THE QUESTION NO. 9 AND 25, BUT WHETHER THE AO HAS REALLY APPLIED HIS MIND BY APPLYING THE CORRECT PROVISION OF LAW. IN OUR VIEW, THE AO HAS NOT APPLIED HIS MIND AT ALL. THE ORDER PASSED BY THE AO IS FLIMSY AND ONE PAGE ORDER WHICH SHOWS TOTAL NON APPLICATION OF MIND AND THE A SSESSMENT ORDER (ORIGINAL) DATED 9.10.2009 HAS NOT DISCUSSED ANY ISSUE MUCH LESS THE ISSUE UNDER SEC. 10B AND THE BASIS OF CALCULATION GIVING THE BENEFIT OF SEC. 10 B TO THE ASSESSEE. EVEN ASSUMING THE INFORMATION WHICH WERE SUPPLIED BY THE ASSESSEE , AS PER QUESTION NO. 9 & 25 OF THE PAPER BOOK , THEN ALSO THIS INFORMATION WAS NOT CORRECT AND COMPLETE INFORMATION I.E WAS NOT A SUFFICIENT DISCLOSURE. I N OUR VIEW THE ASSESSEE HAS WRONGLY CLAIMED THE DEDUCTION OF RS. 22,91,771/- AS MENTION ED BY THE AO. IN OUR VIEW THE 14 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT AO IS REQUIRED TO FORM HIS OPINION ONE WAY OR THE O THER AND ALSO REQUIRED TO ADJUDICATE ON THE ENTITLEMENT AND QUANTUM OF THE AS SESSEE FOR THE DEDUCTION UNDER SECTION 10B OF THE IT ACT ON THE BASIS OF COMPLETE INFORMATION. THE EXPLANATION 2(B) OF SECTION 147 CLEARLY PROVIDES AS UNDER :- EXPLANATION 2(B): WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEE N MADE AND IT IS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAIMED EXCESSIVE LOS S, DEDUCTION, ALLOWANCE OF RELIEF IN THE RETURN; IN OUR VIEW THOUGH THE INFORMATION WERE SUPPLIED BU T THAT WAS NOT SUFFICIENT FOR THE AO FOR COMPLETING THE ASSESSMENT U/S 143(3) BY APPL YING HIS MIND AND FORM HIS OPINION. IN OUR VIEW, THERE WAS NO OPINION FORMED, THEREFORE, WE DO NOT FIND ANY MERIT IN THE SUBMISSION OF THE LD. A/R THAT THERE I S A CHANGE OF OPINION. IN VIEW THEREOF, WE REJECT THE GROUND OF THE ASSESSEE THAT REASSESSMENT WAS BAD IN LAW. 7.2. IN RESPECT TO THE SECOND ISSUE, IT WOULD BE RE LEVANT TO POINT OUT THAT AS PER PAGE 31 OF THE PAPER BOOK, THE TOTAL PROFIT OF BUSI NESS HAS BEEN MENTIONED AT RS. 66,32,853/- AND TOTAL PROFIT OF UNDERTAKING WAS MEN TIONED AT RS. 29,33,736/-. TOTAL TURNOVER OF THE UNDERTAKING AS WELL AS EXPORT TURNO VER WAS MENTIONED AS RS. 46,99,000/- WHEREAS THE TOTAL TURNOVER OF THE BUSIN ESS HAS BEEN MENTIONED AS RS. 8,81,97,775/-. THE TOTAL PROFIT OF THE UNDERTAKING AND TOTAL TURNOVER OF THE UNDERTAKING IS REQUIRED TO BE APPLIED, AS PER THE F ORMULA ACCEPTED IN TERMS OF SECTION 10B(4) OF THE IT ACT. SECTION 10B(4) PROVI DES AS UNDER :- [(4) FOR THE PURPOSES OF SUB-SECTION (1), THE PROFI TS DERIVED FROM EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE SHALL BE TH E AMOUNT WHICH BEARS TO 15 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT THE PROFITS OF THE BUSINESS OF THE UNDERTAKING, THE SAME PROPORTION AS THE EXPORT TURNOVER IN RESPECT OF SUCH ARTICLES OR THIN GS OR COMPUTER SOFTWARE BEARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE UNDERTAKING.] IN OUR OPINION, THE AO HAS CORRECTLY APPLIED THE FO RMULA BUT HAS APPLIED WRONG FIGURE. IN VIEW THEREOF, WE HAVE NO OPTION BUT TO R EMAND THE MATTER TO THE FILE OF THE AO TO RECALCULATE THE DEDUCTION AFTER APPLYING THE CORRECT FORMULA AS MENTIONED UNDER SECTION 10B(4) OF THE IT ACT. IN VIEW THEREO F, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27/05/2016 . SD/- SD/- FOE FLAG ;KNO] YFYR DQEKJ (VIKRAM SINGH YADAV) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27/05/2016 DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-M/S. NATURAL TECHNOLOGIES PVT. LTD., JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT CIRCLE-6, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 976/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR 16 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT SL. NO. DATE INITIAL 1 DATE OF DICTATION 2 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER OTHER MEMBER 3 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S 4 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 5 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. 6 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 8 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER 9 DATE OF DISPATCH OF THE ORDER 17 ITA NO. 976/JP/2013 NATURAL TECHNOLOGIES PVT. LTD. VS. ACIT